Book Review: Fooling Some of the People All of the Time

Fooling Some of the People All of the Time by David Einhorn is the well told and engaging story of his battle with the business development company Allied Capital. Joel Greenblatt in the foreword for the book noted, “I read this book in two sittings. If eating and sleeping hadn’t gotten in the way, it would have been one.” First reading this I assumed it to be a bit of hyperbole but after cracking the first chapter I was hooked. The book is a fascinatingly frustrating story of Einhorn’s – and his firm Greenlight Capital – persistence and regulatory agencies unwillingness or inability to confront fraud even when the facts were handed to them on a platter. The story itself could be a plot from a Grisham novel while Einhorn presents enough financial detail to capture the attention – and present his case against Allied – of even the most experienced financial expert.

The story begins with Einhorn’s 2002 speech at a charity event for the Tomorrows Children’s Fund where several investors were asked to outline an investment idea. Einhorn presented his short thesis of Allied Capital which was the beginning of his nearly seven year battle with the company.

Despite multiple attacks by the company and in the press Einhorn pursues his case against Allied and its affiliates, finding multiple examples of accounting shenanigans and outright loan fraud. Einhorn provides plenty of detail in the 400-plus page book but as a testament to the fascinating story and Einhorn’s skill as a writer it remains a page-turner. Despite presenting what appears to be overwhelming evidence of fraud to regulators, elected official, journalists and other analysts Einhorn finds few allies.

To me this book is a must read for anyone who works or seeks to work in the investment industry and for anyone who cares about our financial regulatory system. As much as this book could be about the failure of our regulators it is also a story of the triumph of hard work and diligent research over those seeking to obscure the truth.

Disclosure: I asked for and received a copy of this book from the publisher. As a member of the Amazon affiliate program I receive compensation if you click on the link to this book and buy this or any other product from Amazon. The price you pay does not change.